The Morning Download: Market Glitch Illustrates CIO Risks

Good morning. The software glitch at Knight Capital that caused trading on approximately 150 stocks to temporarily halt Wednesday was a nightmare for investors. But the consequences could be dire for the firm’s IT organization. Yesterday evening over snacks, I suggested to the CIO of a firm running one of the world’s largest dark pools — facilitating high-volume trades that take place outside the main exchanges — that he’s in one of the few industries that truly recognizes the strategic value of IT. “That’s true,” he said. “But that’s a double-edged sword. The performance expectations run very high as well, and there’s very little tolerance for mistakes.” He paused. “I suspect someone at Knight Capital lost his job today.”